Indian markets to witness a stronger rally: Nirmal Bang
The benchmark indices smartly closed at 14‐month high. The Nifty closed above the 4,700 mark for first time since June 6, 2008. The Sensex was up 254 points at 15924 and the Nifty shut at 4,711 up 75 points or 1.62%. Among the broader indices ‐ the BSE midcap and smallcap indices closed up 2.3% and 1.69% respectively. The rally was led by auto, realty, metal and oil & gas stocks. Buying was also seen in power, capital goods and pharma stocks. The market breadth was quite positive and the total traded turnover stood at Rs 73,090 cr. The Aug nifty future ended with 18 points premium.
Nifty managed to end above the 4,700 mark and hit a 52‐week high of 4,723. This rally was strongly led by auto, metals and oil & gas space. The outlook continues to be robust as global markets are also giving a strong comeback. Stocks rose in Europe & Asia & US index futures advanced as former Fed Reserve Chairman Allan Greespan said the recession may be ending, Chinese manufacturing expanded and earnings from HSBC Holdings Plc and Barclays Plc boosted banks. The S&P 500 is also near to cross the 1000 mark level.
As the overall global scenario looks optimistic, the Indian markets are also about to witness a stronger rally going forward. As the markets have entered into a new phase the leadership could change and get shifted to stronger hands. The strongest of all could be Reliance Ind, Bhel, LT, Sterlite Ind, JSW Steel and TataSteel.
On the downside Nifty has strong support at 4630‐4610 region and any sharp decline below this area could bring nifty upto 4500‐4440 levels. So one should maintain tight stop‐loss around these areas as huge profit taking cannot be ruled out. Currently markets are giving a strong evidence of leading this rally some where close to 4,900 mark.
STOCK IDEA:
1) BHEL (2352) – The stock has been consolidating in the region of 2300‐2180 and today it has broken the range and ended strong. Can be bought on dip with a stop‐loss of 2250 for a target of 2440‐2550.
2) IDBI (108.50) – Buy on dip with a stop‐loss of 102, structure looks positive, near term target looks 115‐122.
3) INDIA CEM (144) – Buy on dip and hold with a stop‐loss of 134, resistance at 146, if maintains above then look for a target of 165.
4) JPASSOCIATE (252) – Buy with a stop‐loss of 241 for a short term target of 265‐273.
5) PRAJ IND (99.50) – Huge delivery volume witnessed, the stock has closed above it’s 50‐day moving average of 95.50, technical suggest that it could rally further upto 107‐114. Buy with a stop‐loss of 92.
Nifty future daily chart (4,729): Nifty future has closed above its previous top of 4703 and ended on a strong note. Going forward if nifty maintains 4700 then we could achieve 4830. This trend continues to remain positive and very strong unless nifty future breaks 4610.
